1. Fixed Costs
These are bills and expenses that don’t vary much from month to month, like rent or mortgage payments, utilities and car payments. We also include subscriptions, such as gym memberships and Netflix accounts, in fixed costs because you’re committed to paying them on a monthly basis.
2. Financial Goals
We believe there are three essential goals everyone should strive for: paying down credit card debt, saving for retirement, and building an emergency fund. But your financial goals can also include larger savings priorities, like a down payment on a new home.
3. Flexible Spending
Finally, consider budgeting no more than 30% of your take-home pay toward flexible spending. These are day-to-day expenses that can vary from month to month, like eating out, groceries, shopping, hobbies, entertainment, or gas.